Slide 1: Third Quarter 2020 Earnings Conference Call
3Q October 29, 2020 Third Quarter 2020 Earnings CONFERENCE CALL Louis Pinkham Rob Rehard Chief Executive Officer Vice President Chief Financial Officer
Slide 2: 3Q 2020 Non-GAAP Financial Measures
3Q 2020 NON-GAAP FINANCIAL MEASURES We prepare financial statements in accordance with accounting principles generally accepted percentage of adjusted net income attributable to Regal Beloit Corporation, adjusted income in the United States of America (“GAAP”). We also periodically disclose certain
Slide 3: Appendix
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Slide 4: Adjusted Diluted Earnings Per Share
3Q 2020 APPENDIX ADJUSTED DILUTED EARNINGS PER SHARE Three Months Ended Nine Months Ended Sep 26, Sep 28, Sep 26, Sep 28, 2020 2019 2020 2019 GAAP Diluted Earnings Per Share $ 1.60 $ 1.19 $ 3.41 $ 4.75 Restructuring and Related Costs 0.12 0.14 0.43 0.24 Loss (Gain) on Businesses Divested and Assets
Slide 5: 2020 Adjusted Annual Guidance
3Q 2020 APPENDIX 2020 ADJUSTED ANNUAL GUIDANCE Minimum Maximum 2020 Diluted EPS Annual Guidance $ 4.75 $ 4.95 Restructuring and Related Costs 0.55 0.55 Loss on Businesses Divested and Assets to be Exited 0.08 0.08 Loss on Sales of Assets 0.01 0.01 Net Loss from Businesses Divested/to be Exited 0.01
Slide 6: Adjusted Income From Operations
3Q 2020 APPENDIX Three Months Ended Power Commercial Transmission ADJUSTED INCOME FROM OPERATIONS Systems Industrial Systems Climate Solutions Solutions Total Regal (Dollars in Millions) Sep 26, Sep 28, Sep 26, Sep 28, Sep 26, Sep 28, Sep 26, Sep 28, Sep 26, Sep 28, 2020 2019 2020 2019 2020 2019 202
Slide 7: Adjusted Net Sales
3Q 2020 APPENDIX Three Months Ended Commercial Power Transmission ADJUSTED NET SALES Systems Industrial Systems Climate Solutions Solutions Total Regal (Dollars in Millions) Sep 26, Sep 28, Sep 26, Sep 28, Sep 26, Sep 28, Sep 26, Sep 28, Sep 26, Sep 28, 2020 2019 2020 2019 2020 2019 2020 2019 2020 2
Slide 8: Adjusted Effective Tax Rate
3Q 2020 APPENDIX ADJUSTED EFFECTIVE TAX RATE Three Months Ended Nine Months Ended (Dollars in Millions) Sep 26, Sep 28, Sep 26, Sep 28, 2020 2019 2020 2019 Income before Taxes $ 83.4 $ 60.7 $ 181.8 $ 252.5 Provision for Income Taxes 17.1 9.9 39.5 47.5 Effective Tax Rate 20.5% 16.3% 21.7% 18.8% Incom
Slide 9: Free Cash Flow
3Q 2020 APPENDIX Three Months Nine Months FREE CASH FLOW Ended Ended (Dollars in Millions) Sep 26, Sep 28, Sep 26, Sep 28, 2020 2019 2020 2019 Net Cash Provided by Operating Activities $ 120.3 $ 140.6 $ 309.9 $ 271.2 Additions to Property Plant and Equipment (9.3) (21.1) (29.7) (77.3) Free Cash Flow
Slide 10: Organic Sales Growth
3Q 2020 APPENDIX ORGANIC SALES GROWTH Three Months Ended (Dollars in Millions) Power Commercial Industrial Climate Transmission Systems Systems Solutions Solutions Total Regal Net Sales Three Months Ended Sep 26, 2020 $ 218.5 $ 138.8 $ 234.0 $ 166.9 $ 758.2 Impact from Foreign Currency Exchange Rate
Slide 11: Operating Leverage - Power Transmission Solutions
3Q 2020 APPENDIX OPERATING LEVERAGE-POWER TRANSMISSION SOLUTIONS Three Months Ended (Dollars in Millions) Sep 26, Sep 28, 2020 2019 Change GAAP Income from Operations $ 18.9 $ 20.9 $ (2.0) Adjusted Income from Operations $ 21.3 $ 21.8 $ (0.5) Net Sales $ 166.9 $ 182.8 $ (15.9) Adjusted Net Sales $ 1
Slide 12: Total Gross Debt / EBITDA
3Q 2020 APPENDIX TOTAL GROSS DEBT/EBITDA TOTAL GROSS DEBT/ADJUSTED EBITDA (Dollars in Millions) (Dollars in Millions) LTM Sep 26, LTM Sep 26, 2020 2020 Net Income $ 179.9 Net Income $ 179.9 Plus: Taxes 53.2 Plus: Taxes 53.2 Plus: Interest Expense 43.7 Plus: Interest Expense 43.7 Less: Interest Incom
Slide 13: Total Net Debt / EBITDA
3Q 2020 APPENDIX TOTAL NET DEBT/EBITDA TOTAL NET DEBT/ADJUSTED EBITDA (Dollars in Millions) (Dollars in Millions) LTM Sep 26, LTM Sep 26, 2020 2020 Net Income $ 179.9 Net Income $ 179.9 Plus: Taxes 53.2 Plus: Taxes 53.2 Plus: Interest Expense 43.7 Plus: Interest Expense 43.7 Less: Interest Income (5
Slide 14: Fiscal 2019 First Quarter Schedule for Ongoing Business
3Q 2020 APPENDIX The following tables outline by quarter and full year the 2019 net sales and income from operations, and the full year adjusted diluted earnings per share, illustrating the impact of businesses divested and to be exited. Power Commercial Industrial Climate Transmission Systems Syste
Slide 15: Fiscal 2019 Third Quarter Schedule for Ongoing Business
3Q 2020 APPENDIX Power Commercial Industrial Climate Transmission Systems Systems Solutions Solutions Total Regal Fiscal 2019 Third Quarter Schedule for Ongoing Business Net Sales Three Months Ended September 28, 2019 $ 214.8 $ 143.8 $ 230.9 $ 182.8 $ 772.3 Net Sales from Businesses Divested/to be E
Slide 16: Fiscal 2019 Twelve Months Ended for Ongoing Business
3Q 2020 APPENDIX Power Commercial Industrial Climate Transmission Systems Systems Solutions Solutions Total Regal Fiscal 2019 Twelve Months Ended for Ongoing Business Net Sales Twelve Months Ended December 28, 2019 $ 879.2 $ 558.0 $ 940.3 $ 756.4 $ 3,133.9 Net Sales from Businesses Divested/to be Ex
Slide 17: Shipping Days
3Q 2020 APPENDIX Shipping 1Q 2Q 3Q 4Q FY Days 2014 63 63 63 64 253 2015 64 63 64 59 250 2016 64 64 63 60 251 2017 64 63 63 60 250 2018 63 64 63 61 251 2019 63 63 63 61 250 2020 63 63 63 64 253 Regal operates on a 52/53 week fiscal year ending on the Saturday closest to December 31 Fiscal Years 2